ECCP at Work

ECCP@Work Featured Articles | July 18, 2023

July 18, 2023

ECCP Online

ECCP at Work

Win: PH participation in GSP+ to boost exports 

Sen. Sherwin Gatchalian welcomed the proposed renewal of the Philippines’ participation in the GSP+, saying the move boosts the competitiveness of the country’s exports and increases investment prospects. The senator is part of the Philippine Congressional Delegation who visited the European Parliament in October 2022 to discuss with their counterparts the status of the GSP+, among other things.

Government borrows less at P147 billion in May 

The government accumulated P147 billion in borrowings in May, largely from the domestic market, coming from a net repayment of almost P260 billion in the same period last year. Data from the Bureau of the Treasury showed that total borrowings in May reached P146.78 billion as compared to the P258.97 billion repayment in May 2022.

Green lanes to boost FDIs

As the country pursues P3.5-trillion worth of investment leads, the government launched yesterday the green lanes for strategic investments established through Executive Order No. 18. Meant to boost foreign direct investments , EO 18 calls for the simultaneous processing of applications where national government agencies (NGAs) and LGUs that receive applications for permits and licenses under the timeframe set under the Ease of Doing Business Act that will significantly cut down the processing time for documents needed to start a business in the country to just 3 to 20 days.

P40B ecozones to gain from streamlined process

The PEZA has attracted P40 billion new economic zones, both new and expansion, that would cater to the growing number of locators. This is on top of the  P33 billion ecozone development projects  approved  for January to June this year. Tereso Panga,  PEZA director-general, said the government has been working on  streamlining and harmonizing the requirements that would speed up the proclamation process for ecozone development applications.

Marcos signs Maharlika fund bill into law 

President Marcos Jr. signed the controversial Maharlika Investment Fund (MIF) bill into law. The MIF is a sovereign wealth fund that the government targets to use to invest in foreign currencies, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects. Under the law, the initial capital will come from the investible funds of the Land Bank of the Philippines, the Development Bank of the Philippines, declared dividends of the Bangko Sentral ng Pilipinas, and other sources.

BSP keeps door open to further rate hikes

NEW PHILIPPINE central bank Governor Eli M. Remolona signaled that further monetary policy tightening is still on the table for the Southeast Asian country and said it’s “premature” to talk about cutting the key rate. The Bangko Sentral ng Pilipinas (BSP) remains on the “tightening side” as it monitors upside risks to inflation, including El Niño and wage hikes, Mr. Remolona said in Canada on Friday in a Bloomberg Television interview, his first since taking over leadership of the central bank. The central bank is also watching for any “sharp” movement in the Philippine peso if the US Federal Reserve further tightens monetary policy, Mr. Remolona said. The local currency has strengthened and is among the region’s best performers so far this year. The Philippine economy remains “very strong,” the central bank chief said, while adding that the BSP would still like to see what impact its most aggressive tightening cycle in two decades — which lifted the key rate to a 16-year high — will have on growth.

Senate keen to pass legislated wage hike

Senate President Juan Miguel Zubiri on Sunday said the country’s economic growth amid the COVID-19 pandemic would help businesses shoulder the cost of the proposed nationwide increase of P150 in the daily wage of workers in the private sector. “I spoke to several businessmen who are agreeable with the move to increase wages as they have seen a marked increase in Filipino workers wanting to leave the country and work abroad,” Zubiri told the Inquirer. “They are experiencing a ‘brain drain’ on skilled workers and having a hard time hiring even new graduates who are [seeking] greener pastures abroad,” he added. He said he and his colleagues were determined to pass a legislated across-the-board salary increase despite the expected opposition from President Marcos’ economic team. The decision of the Regional Tripartite Wages and Productivity Board on June 26 to increase by P40 the daily wage of workers in the National Capital Region was “too little, too late,” according to Zubiri.

Economic managers upbeat on meeting medium-term fiscal targets 

The Philippines’ economic managers said on Thursday that they are on track to meet the targets under the government’s medium-term fiscal program. “We’re on track. In fact, we’re doing better than our original plan,” Department of Finance (DoF) Secretary Benjamin E. Diokno said during the Philippine Economic Briefing in Toronto, Canada. Under the medium-term fiscal framework, the government aims to reduce the debt-to-gross domestic product (GDP) ratio to less than 60% by 2025. At the same time, it expects to decrease the deficit-to-GDP ratio to 3% by 2028. The deficit-to-GDP ratio at the end of March was 4.84%, lower than the 6.41% recorded in the first quarter of the previous year and the 7.33% seen in 2022. The government has set the deficit ceiling for this year at P1.499 trillion, equivalent to 6.1% of the gross domestic product.

NAIA traffic hits 22 million in 6 months

The Ninoy Aquino International Airport (NAIA) served more than 22 million passengers in the first half of the year on the sustained recovery of air travel in the pandemic aftermath. The Manila International Airport Authority (MIAA) reported that NAIA traffic surged by 78 percent to 22.22 million in the first semester of the year from 12.49 million in the same period last year. The main gateway to the Philippines recorded a total of 24.41 million travelers in the first half of 2019, signaling that NAIA is close to reaching its pre-pandemic level again. Likewise, MIAA said that flight movements in NAIA totaled 135,883 in the first semester, up by 49 percent against 91,091 during the same period in 2022.

'Huge’ power generation cost to be recouped over 3 years 

A Supreme Court ruling that allowed the staggered recovery of P22.64 billion in power generation costs would likely be implemented over a three-year period starting next year, the Energy Regulatory Commission (ERC) said. The amount would be collected from customers of power distributor Manila Electric Co. (Meralco) and other distribution utilities and electric cooperatives in Luzon. “We are mindful of the timing,” ERC Chair Monalisa Dimalanta said. “The amount to be recovered from customers is huge and cannot be recovered in one or two years. It will be spread in three years.” The ERC computed the amount based on simulations made by the Independent Electricity Market Operator of the Philippines (Iemop).The SC had affirmed the 2013 order issued by the ERC that authorized Meralco to collect generation costs totaling P22.64 billion or P9.107 per kilowatt-hour (kWh).

DA hopes to stir more international support for agriculture sector

The Department of Agriculture (DA) hopes to stir more international support for the advancement of the local agriculture sector. In hosting the Development Partners’ Forum (DPF) for the Agriculture and Fisheries Sector last week, DA Senior Undersecretary Domingo Panganiban hopes that it will open up new opportunities for future collaboration and lead to useful areas of understanding in handling challenges and emerging issues affecting Philippine agriculture. The forum, which was initiated by DA’s Project Development Service (PDS) in collaboration with the International Affairs Division (IAD), seeks to inform development partners and other institutions that provide Official Development Assistance (ODA) in line with the DA’s current thrusts, priorities, projects and programs. It also aims to further expand partnerships with development partners, explore investment opportunities, and enlist the help of ODA partners.

Building materials price growth in Metro Manila eases in June

Price growth of construction materials in Metro Manila eased at both the wholesale and retail levels in June, the Philippine Statistics Authority (PSA) reported on Friday. “Base effects, moderating commodity prices, and slowing demand likely translated to the slower expansion,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail. For Oikonomia Advisory & Research, Inc. President and Chief Economist John Paolo R. Rivera, the slowdown in bulk building materials can be attributed to slower construction activities as interest rates remain relatively higher.  reliminary data from the PSA showed that the Construction Materials Wholesale Price Index (CMWPI) in the National Capital Region (NCR) saw a slowdown, recording a year-on-year growth rate of 5.9% in June. This was the slowest growth in 16 months since the reading of 5.2% in February 2022. The latest data showed a decrease compared to the 6.5% growth logged in May and the 8.9% growth recorded a year earlier. June marked the eighth consecutive month of declining growth rates.

Economic team woos Canadian investors to explore PH market 

The administration's economic managers have urged Canadian companies to look into opportunities in the Philippines during an investor roadshow in Toronto on July 13. DOF Secretary Benjamin Diokno underscored that the two countries have a wide range of opportunities and cooperation to explore in terms of trade and investments in his speech during the Philippine Economic Briefing (PEB). In a statement Friday, the DOF said Canada ranked 20th among the Philippines' trading partners in 2022, with bilateral trade amounting to USD1.5 billion. There are also nearly a million overseas Filipinos in Canada, whose cash remittances to the Philippines reach USD1.2 billion.

Marcos pressed to discuss PPP, apprenticeship measure in SONA

Business groups want President Ferdinand R. Marcos, Jr. to outline his plans for key economic reforms, such as the impending Public-Private Partnership (PPP) Law, in his Second State of the Nation Address (SONA) on July 24.  Makati Business Club (MBC) Chairman Edgar O. Chua told reporters on the sidelines of the MBC’s forum in Makati City last week that Mr. Marcos should also discuss his intentions on an Ease of Paying Taxes Law, as well as a measure that will govern apprenticeship, which is seen as a key step in making students ready for employment. “The Apprenticeship Law (would) address two things: one is enhancing the competency of our staff… second is it will lead to better employment opportunities for them,” Mr. Chua said.

House bill seeks to ban LGUs obstruction of national projects 

A bill seeking to bar local government units (LGUs) from interfering with National Government (NG) projects has been filed at the House of Representatives. The proposed National Government Projects Implementation Act is expected to accelerate the rollout of NG infrastructure, health, education, and other projects. House Bill No. 8300 only allows LGU intervention when it is specifically requested by the agency in charge of implementing the project. If signed into law, interfering LGU officials could be liable for administrative, civil, or criminal penalties. Other details of the bill are expected to be fleshed out in the implementing rules and regulations, to be drafted by the Department of the Interior and Local Government. The bill may need to be harmonized with Section 2(c) of Republic Act No. 7160 or the Local Government Code, which requires “all national agencies and offices to conduct periodic consultations with appropriate local government units, nongovernmental and people’s organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions.”

‘Green lanes’ touted as major selling point for investing in PHL 

The Anti-Red Tape Authority (ARTA) said “green lanes” to ease the permit process for strategic investments will play a key role in attracting foreign investment. ARTA Director-General Ernesto V. Perez said Executive Order (EO) No. 18, which set up the green lanes will help the Philippines enhance its standing as a destination for investment in Southeast Asia. EO 18, signed by President Ferdinand R. Marcos, Jr. in February, was officially launched last week. The EO designates ARTA as a member of the technical working group that will act on complaints regarding violations of Republic Act No. 9485, also known as the Anti-Red Tape Act of 2007, as amended. The government defined strategic investments as investment pledges received by Mr. Marcos during his travel, as well as those recommended by the Fiscal Incentives Review Board to the Office of the President, foreign direct investment projects endorsed by the Inter-agency Investment Promotion Coordination Committee, and priority projects or activities listed in the Strategic Investment Priority Plan.   

ICAO technical mission in town for review of CAAP operations 

The Civil Aviation Authority of the Philippines (CAAP) said it is hosting an International Civil Aviation Organization (ICAO) technical mission to assess CAAP’s operations. In a statement, CAAP said that the mission intends to analyze CAAP’s air traffic management (ATM) and aeronautical information services or aeronautical information management (AIS/AIM) systems between July 17 and July 21. The technical mission will include discussion between the Philippines and the ICAO Asia-Pacific Regional Office to help national regulators implement ICAO standards and recommended practices, procedures for air navigation services, and regional plans. CAAP Air Traffic Service and Aerodrome and Air Navigation Service Safety Oversight Office personnel and ICAO representatives are expected to attend the week-long activity.

DENR task force to assess reclamation works impact

The Department of Environment and Natural Resources (DENR) said it will form a task force to assess the impact of reclamation activities, particularly in Manila Bay. “We’ve organized the team (of Filipino scientists), and we will be taking on some foreign expertise,” Environment Secretary Maria Antonia Yulo-Loyzaga told reporters on Monday on the sidelines of a reclamation forum. According to Environment Undersecretary Jonas R. Leones, nine of the reclamation sites in the National Capital Region cost a combined P330.6 billion over 11,143.72 hectares. The Parañaque Reclamation Project is the largest at P76.7 billion, followed by the Pasay City Reclamation Project (P72 billion) and Navotas Coastal Bay Reclamation Project (P58 billion).

ERC authorizes 2024 generation cost collections of over P22 billion 

The Energy Regulatory Commission (ERC) said it will allow the collection of P22.64 billion worth of power generation cost starting next year. “We will issue an order because IEMOP (Independent Electricity Market Operator of the Philippines) needs the authority to collect. This will be collected from the consumers, but not all gencos (generation companies) have claims,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta told reporters. Ms. Dimalanta said the Commission is planning to defer the collection of P22.64 billion over the next three years starting in 2024. She said that the Commission has computed the rates to be collected. She declined to speak in detail about the rates, but added that the payments will be too high if collected over one or two years.

Big-time oil price hike on July 18 

Petroleum companies have announced big-time price hikes effective 12:01 a.m. on Tuesday (July 18, 2023). In separate advisories on Monday, Caltex, Cleanfuel, Flying V, Petro Gazz, Petron, Phoenix, PTT, Seaoil, Shell, and Unioil said gasoline prices will increase by PHP1.90 per liter and diesel prices by PHP2.10 per liter. Also, Caltex, Petron, Seaoil, and Shell will hike kerosene prices by PHP1.80 per liter. According to experts, the easing of inflation in the United States supported global commodity prices, which is expected to boost consumption.

Marcos signs Maharlika fund bill into law

President Ferdinand Marcos Jr. on Tuesday signed the controversial Maharlika Investment Fund (MIF) bill into law despite warnings from some economists and lawmakers that it may put the Philippine economy at risk. In his speech following the signing of the MIF, Marcos described the fund as an “extremely important measure” and “bold step” as the government moves to strengthen the economy in a post-pandemic world.

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